Int’l labor group warns of wage cuts for migrant workers in 2009
MANILA, Philippines - The threat of the global economic crisis might just come true as wage cuts await the millions of migrant workers worldwide, a recent report conducted by the International Labor Organization (ILO) said on Tuesday.
Referring to the report titled Global Wage Report 2008-2009, ILO Director General Juan Somavia said in a statement on Tuesday that difficult times lie ahead for the world’s 1.5 billion wage earners.
“Slow or negative economic growth, combined with highly volatile food and energy prices, will erode the real wages of many workers, particularly the low-wage and poorer households. The middle classes will also be seriously affected," he said.
Economists have warned the Philippines to brace itself for the effect of a worsening crisis considering that the economy is highly dependent on the remittances of more than eight million overseas Filipinos.
Government data show that in 2007 alone, overseas Filipinos remitted a total of $14.4 billion to the economy. Of the amount, $8.2 billion were remitted from the Americas, largely from the United States, which has been hit by recession.
Various migrant groups have also asked the Philippine government to prepare for the impending lay off of tens of thousands of Filipino workers as other foreign economies, notably the United Kingdom and Taiwan, are already reeling from the impact of the global crisis.
Based on figures obtained by the International Monetary Fund, the ILO said it forecasts a global growth in real wages at best reach 1.1 percent in 2009, compared to 1.7 percent in 2008.
However, it also said that wages are expected to decline in a large number of countries, including the major economies. It said that even wage growth in industrialized countries is expected to fall from 0.8 percent in 2008 to -0.5 percent in 2009.
The ILO report showed that this prediction is part of the global economic pattern that always fails to advance the wage of workers.
According to the report, each additional one percent in the annual growth of Gross Domestic Product per capita led to an average of only a 0.75 percent increase in the annual growth of wages between 1995 and 2007.
Moreover, it said that there was an “unsustainable growth in wage inequality."
Since 1995, ILO reported that the inequality between the highest and lowest wages has increased in more than two-thirds of the countries surveyed.
Among developed countries, Germany, Poland, and the United States are amongst the countries where the gap between top and bottom wages has increased most rapidly while inequality has also increased harshly in Argentina, China, and Thailand.
“If this pattern were to be followed in the rapidly spreading global downturn it would deepen the recession and delay the recovery", said Somavia.
However, some countries have succeeded in reducing wage inequality, particularly in France and Spain, as well as Brazil and Indonesia, though the last two countries still maintain a high level of inequality.
In addition, the report said that even the pay gap between genders is high.
“Although about 80 percent of the countries for which data are available have seen an increase in the ratio of female to male average wages, the size of change is small and in some cases negligible," said the ILO.
Having found out the information mentioned, the labor group encouraged governments to “display a strong commitment towards protecting the purchasing power of wage earners."
ILO said that minimum wages should “effectively protect the most vulnerable workers" and that it together with wage bargaining should be “complemented by public intervention through income support measures".
“Effective minimum wages – by providing a wage floor – can reduce wage inequality in the bottom half of the wage distribution, limit low pay, and reduce the gender pay gap," it said.
The ILO study also said that there has been a “reactivation" of minimum wages around the world in the past years in order to reduce social tensions because of obvious inequalities.
In 2001 to 2007, minimum wages have risen by an average of 5.7 percent yearly around the world. - GMANews.TV
Referring to the report titled Global Wage Report 2008-2009, ILO Director General Juan Somavia said in a statement on Tuesday that difficult times lie ahead for the world’s 1.5 billion wage earners.
“Slow or negative economic growth, combined with highly volatile food and energy prices, will erode the real wages of many workers, particularly the low-wage and poorer households. The middle classes will also be seriously affected," he said.
Economists have warned the Philippines to brace itself for the effect of a worsening crisis considering that the economy is highly dependent on the remittances of more than eight million overseas Filipinos.
Government data show that in 2007 alone, overseas Filipinos remitted a total of $14.4 billion to the economy. Of the amount, $8.2 billion were remitted from the Americas, largely from the United States, which has been hit by recession.
Various migrant groups have also asked the Philippine government to prepare for the impending lay off of tens of thousands of Filipino workers as other foreign economies, notably the United Kingdom and Taiwan, are already reeling from the impact of the global crisis.
Based on figures obtained by the International Monetary Fund, the ILO said it forecasts a global growth in real wages at best reach 1.1 percent in 2009, compared to 1.7 percent in 2008.
However, it also said that wages are expected to decline in a large number of countries, including the major economies. It said that even wage growth in industrialized countries is expected to fall from 0.8 percent in 2008 to -0.5 percent in 2009.
The ILO report showed that this prediction is part of the global economic pattern that always fails to advance the wage of workers.
According to the report, each additional one percent in the annual growth of Gross Domestic Product per capita led to an average of only a 0.75 percent increase in the annual growth of wages between 1995 and 2007.
Moreover, it said that there was an “unsustainable growth in wage inequality."
Since 1995, ILO reported that the inequality between the highest and lowest wages has increased in more than two-thirds of the countries surveyed.
Among developed countries, Germany, Poland, and the United States are amongst the countries where the gap between top and bottom wages has increased most rapidly while inequality has also increased harshly in Argentina, China, and Thailand.
“If this pattern were to be followed in the rapidly spreading global downturn it would deepen the recession and delay the recovery", said Somavia.
However, some countries have succeeded in reducing wage inequality, particularly in France and Spain, as well as Brazil and Indonesia, though the last two countries still maintain a high level of inequality.
In addition, the report said that even the pay gap between genders is high.
“Although about 80 percent of the countries for which data are available have seen an increase in the ratio of female to male average wages, the size of change is small and in some cases negligible," said the ILO.
Having found out the information mentioned, the labor group encouraged governments to “display a strong commitment towards protecting the purchasing power of wage earners."
ILO said that minimum wages should “effectively protect the most vulnerable workers" and that it together with wage bargaining should be “complemented by public intervention through income support measures".
“Effective minimum wages – by providing a wage floor – can reduce wage inequality in the bottom half of the wage distribution, limit low pay, and reduce the gender pay gap," it said.
The ILO study also said that there has been a “reactivation" of minimum wages around the world in the past years in order to reduce social tensions because of obvious inequalities.
In 2001 to 2007, minimum wages have risen by an average of 5.7 percent yearly around the world. - GMANews.TV
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